Question

The current sections of Marin Inc.’s balance sheets at December 31, 2021 and 2022, are presented here. Marin Inc.’s net income for 2022 was $317,500. Depreciation expense was $52,500. 2022 2021 Current assets Cash $77,500 $ 111,250 Accounts receivable 106,250 86,250 Inventory 97,500 77,500 Prepaid expenses 21,250 23,750 Total current assets $302,500 $298,750 Current liabilities Accrued expenses payable $ 7,500 $ 20,000 Accounts payable 110,000 90,000 Total current liabilities $117,500 $ 110,000 Prepare the net cash provided by operating activities section of the company’s statement of cash flows for the year ended December 31, 2022, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Statement of cash flows (PARTIAL)

Particulars	$	$
Cash flow from Operating Activities
Net income	317,500
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	52,500
Changes in current operating assets and liabilities:
Accounts receivable increase	-20,000
Inventory increase	-20,000
Prepaid expenses decrease	2,500
Accounts payable increase	20,000
Accrued expenses payable decrease	-12,500
Net cash provided by Operating Activities		$340,000

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